Starbucks Names New CEO Amid Sales Decline: The Week in Retail

Starbucks has named a new CEO amid declining sales in the second quarter of 2024, while Temu faces data privacy concerns in Mexico and the United States, resulting in legal action. For retailers, Mexico offers an opportunity to cut shipping costs and reduce their carbon footprint as nearshoring becomes increasingly popular.

Check out more this week in retail!

Starbucks Names Brian Niccol CEO Amid Sales Decline

Starbucks has appointed Brian Niccol, former CEO of Chipotle, as its new chief executive officer, replacing Laxman Narasimhan amid declining sales in key markets and stock performance. Niccol, known for revitalizing Chipotle by driving significant sales and stock value growth, is expected to focus on innovation and digital transformation at Starbucks. His leadership will be crucial in addressing challenges, including labor relations with Starbucks Workers United, as the company navigates a strategic shift.

Smart & Final Launches in Mexico, Rivals Costco, Sam's Club

Smart & Final has entered the Mexican market, offering bulk shopping without the need for an annual membership, setting itself apart from competitors like Sam’s Club and Costco. The chain's no-membership model aims to attract a broader customer base by providing competitive pricing and regular promotions. This expansion could disrupt the wholesale sector, which has been dominated by membership-based stores that rely on customer loyalty and product exclusivity.

Temu Faces Data Privacy Concerns in Mexico, US

Temu is under increasing scrutiny for its extensive data collection practices in Mexico and the United States, leading to legal actions and regulatory concerns. The platform collects more user data than competitors like Amazon and Mercado Libre, raising privacy issues, particularly after the Attorney General of Arkansas filed a lawsuit alleging that Temu operates as a “data-theft business.”

Nearshoring Gains Popularity in Fashion; 71% to Adopt by 2025

Nearshoring is rapidly gaining traction in the fashion industry, with 71% of brands expected to adopt this strategy by 2025, and Mexico is emerging as a key beneficiary due to its proximity to the United States and the USMCA trade agreement. This shift is reducing delivery times, lowering carbon footprints, and addressing supply chain disruptions from the pandemic and geopolitical tensions. 

Starbucks Reports Declining Sales and Foot Traffic in 2Q24

Starbucks reported weaker-than-expected 2Q24 earnings, with revenue falling 1% to $9.1 billion, missing estimates, and global same-store sales declining 3%, marking the second consecutive quarter of decline. The company revised its fiscal 2024 outlook downward, expecting lower global revenue and same-store sales growth, particularly in China, where sales dropped 14%. 

Mexican Fashion Retailer Grupo Axo Eyes IPO

Grupo Axo, a Mexican fashion retailer, is considering an initial public offering (IPO) later this year but has not yet finalized its decision or chosen a listing location, either in the United States or Mexico. The company, which markets international brands like Abercrombie & Fitch and The North Face, reported a 23% increase in earnings to MX$959.6 million (US$50.2 million) for the first quarter of the year.